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Solend seized $170M of user funds

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Re: Solend seized $170M of user funds

#161

Post by throw123123123 »

3a2d29 wrote: post #25
PragmaticPulp wrote: post #7

One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT propo…

Not to be super “arm chair psychologist” about this, but I always thought the whole “you deserve it if you got scammed” mentality comes from the people that believe crypto will replace all modern finance. For crypto to replace modern finance, it needs to be better in every way (so it’s a total replacement). Decentralized currency is better for some things, worse for things like preventing scams. If modern finance pre…

> If modern finance prevents scams better,

Its better at preventing a type of scam, but significantly worse at legal scam -> how much is an 8% inflation of the dollar on dozens of trillions of USD denominated financial instruments?

And there is also plenty of equity scams that are sanctioned by government - the kind that suppresses the ability of people to invest or get funded, to give special permissions to those that play the rules, etc. The way some get bailouts at the expense of the rest.

A system with a high degree of freedom and lack of oversight will have higher scams. The big question is, if people were given the choice to participate in both systems, which one will thrive?

Re: Solend seized $170M of user funds

#163

Post by chii »

throw123123123 wrote: post #161
3a2d29 wrote: post #25

Earlier quoted context omitted.

Not to be super “arm chair psychologist” about this, but I always thought the whole “you deserve it if you got scammed” mentality comes from the people that believe crypto will replace all modern finance. For crypto to replace modern finance, it needs to be better in every way (so it’s a total replacement). Decentralized currency is better for some things, worse for things like preventing scams. If modern finance pre…

> If modern finance prevents scams better, Its better at preventing a type of scam, but significantly worse at legal scam -> how much is an 8% inflation of the dollar on dozens of trillions of USD denominated financial instruments? And there is also plenty of equity scams that are sanctioned by government - the kind that suppresses the ability of people to invest or get funded, to give special permissions to those th…

> legal scam ...

calling inflation a legal scam is borderline on the conspiracy fence.

> if people were given the choice to participate in both systems, which one will thrive?

Well, crypto has been around for about 10 years. There's been plenty of choice, and yet what do you see today?

Re: Solend seized $170M of user funds

#164

Post by peyton »

3a2d29 wrote: post #151
wyager wrote: post #137

Earlier quoted context omitted.

> For crypto to replace modern finance, it needs to be better in every way I don't think this follows logically at all. Can you explain your thought process? (FWIW, I think that most likely the only component of finance that will be replaced by "crypto" [most likely just bitcoin] is the money and payments layer, so I probably agree with you in general.)

So I am thinking about how many crypto fans suggest fiat money and banks are a thing of the past. I don’t think fiat money or banks can go away unless all their functionality can be replaced by crypto and do at least as well. With finances, it’s more about preventing the bad over getting the good. As long as crypto introduces a big problem, there’s no way it becomes the primary financial tool. In fairness, I am makin…

If you look at the history of finance, all it takes is some better notion of credit. If I can get a better deal using one system over another, that’s what I’ll do. I don’t care how many millions of people are employed offering thousands of niche services by the system I don’t choose.

Re: Solend seized $170M of user funds

#165

Post by acover »

rglover wrote: post #80
PragmaticPulp wrote: post #7

One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT propo…

They say "do your own research" and then when you do and have questions about difficult to conceive (or seemingly irrational things) they belittle you, attack you, and—at least on Twitter—reply with snarky memes. As soon as I started investigating Ethereum, ERC-20 tokens, etc. at a technical level, I realized it was a house of cards of immense proportions. The place that didn't happen? Bitcoin. There's not a lot of e…

What's wrong with erc20 tokens?

Re: Solend seized $170M of user funds

#166

Post by Zaskoda »

ShamelessC wrote: post #148
Zaskoda wrote: post #20

I've been working on a game for Ethereum for a while. In recent times, "I" has become "we" and we're getting a fair bit more serious about it. In the last year, we watched a bunch of local startups with relatively weak game concepts get heavily funded to build with Solana. It made me sad and, admittedly, a bit jealous at the time. In retrospect, I couldn't be more happy that we're still building for the Ethereum virt…

You're building ones of those games people get paid to play and you're... proud of this work? As someone who has watched gaming become ruined by micro transactions and loot boxes, that's challenging for me to wrap my head around. Sorry if that seems rude but I literally can't imagine a sketchier idea than that. If you have game dev skills, please please, just make an actual fun video game that you purchase and own fo…

No, I'm building a game that runs entirely on EVM. I love the notion that players pay per transaction and that money goes to people who run nodes that support the network. We are not designing any intentional "play to earn" mechanics. But thanks for assuming.

Re: Solend seized $170M of user funds

#167

Post by itsmeacupoftea »

ShamelessC wrote: post #145
edf13 wrote: post #110

Just to clarify - this is Solana, which is and always has been big vc funded and controlled. It has always been semi-centralised… but has big funds for pr. It isn’t bitcoin or even Eth… it isn’t decentralised

Right, but neither are ETH and BTC for 99.999% of the population that can't read smart contracts or manage their own wallet.

Bold of you to think even 80,000 odd people can competently read smart contracts and manage their own wallet.

Re: Solend seized $170M of user funds

#168

Post by jquery »

rglullis wrote: post #84
djbusby wrote: post #83

Earlier quoted context omitted.

How would a technical implementation detail block legislation?

The point is not the legislation. The point is enforcement . You can write and pass whatever law you want. If it can not be enforced, it does not exist.

If our government can catch money launderers because they’re running empty washing machines or selling unused tickets to shows, it’s hard to think of anything useful crypto can do that couldn’t be meaningfully regulated away.

Re: Solend seized $170M of user funds

#169

Post by UncleEntity »

colinsane wrote: post #114
potatototoo99 wrote: post #37

Earlier quoted context omitted.

I'm only surprised why would the Solend team care about crashing the price of Solana. Why would the Solana care either for that matter (I don't know if they are the same people though). If it crashes because of a sudden bulk market liquidation then it is just working as intended, and eventually the price of SOL will recover if there is user confidence.

whale has put up $170M of SOL and borrowed $100M of USD. that USD was supplied by other people on Solend who expect to be repaid. “liquidation” is a way to ensure those lenders are repaid: if the borrower no longer has enough collateral to be incentivized to pay back the loan — or rather before that happens — liquidators will recover the lenders’ money by seizing the borrower’s collateral, selling it on the market, a…

Is that literally the case though?

Or is it that if the price crumbles the whale will be able to pay back the loan for pennies on the dollar because they need to repay in the crashed tokens?

One way was a really good bet and having their tokens confiscated to ensure they don’t benefit is probably outright fraud while the other way is just a bankruptcy where confiscating their tokens is probably outright fraud unless they have a previous contractual agreement which states it is permissible.

Hard to tell what is happening in the cryptocurrency space because too many people have an agenda to just state the facts.

—edit—

Or a loan which may or may not need to be liquidated at some future point and they seized the collateral “just in case” like pre-crime.

Re: Solend seized $170M of user funds

#170

Post by nativeit »

If the "whale" happens to be an individual or organization that just needed to launder a shitload of illicit funds and found a handy loophole, then of course they didn't show up to vote--they already got their USD, why bother?
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